Saturday, September 18

Analysts positive on Icon Offshore’s participation in Petronas Carigali’s umbrella contract


KUCHING: Analysts are positive on Icon Offshore Bhd’s (Icon Offshore) involvement in Petronas Carigali Sdn Bhd’s (Petronas Carigali) umbrella contract for spot charter in the following categories: anchor handling tug (60 MT BP), straight supply vessel (SSV), platform supply vessel (PSV), UV, workboat and workbarge.

The research arm of Maybank Investment Bank Bhd (Maybank IB Research) in a recent report, viewed that of these categories, Icon Offshore is most exposed to the anchor handling tug (AHT) segment, based on its fleet profile.

Operationally, the research firm said Icon Offshore will take delivery of seven new offshore support vessels (OSVs) in 2015 to 2016, comprising of two workboats, two 10,930bhp anchor handling tug supply vessels (AHTS), two PSVs and one FCB.

On its outlook, Maybank IB Research viewed, securing charters for Icon Offshore’s fleet will be key in 2015.

“We also see weakness in daily charter rates (DCRs) in all categories for new/extension contracts in 2015.

“The weakness in DCRs will be most pronounced in the 5,000 bhp AHTS segment. With the challenging outlook, Icon Offshore’s planned venture into the Indonesia OSV market will likely be delayed for now,” it added.

Meanwhile, the research arm of TA Securities Holdings Bhd (TA Securities) in a separate report, opined, “In a low oil price environment, we believe it is inevitable that OSV contractors at the bottom of the value chain will get squeezed for lower rates.

“Fleet utilisation will also trend lower given less jobs following capital expenditure (capex) cuts by oil majors.

“In addition, fewer jobs translates to higher competition, and hence DCR compression.”

Therefore, the research firm said, although Icon Offshore is relatively resilient compared with its peers given its young fleet and sizeable scale, it remains concerned that earnings will be afflicted.

TA Securities maintain a ‘sell’ recommendation on Icon Offshore while Maybank IB Research maintained a ‘hold’ call on the stock.